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Gee Whats The Real Strategic Reason A Cable Company Would Want To Charge Based On Use

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by Kevin Maney
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Jan 18 2008 12:00am EDT

Gee, What's the Real Strategic Reason a Cable Company Would Want to Charge Based on Use?

Time Warner Cable says it will test pricing for broadband Net access based on amounts of data downloaded. A spokesman says the reason is to improve network performance, and notes that 5% of customers account for 50% of traffic -- probably from downloading high-def video.

Now, let's see -- that pricing structure would be really bad news for any Web entity selling downloadable movies and TV shows. Customers of cable company broadband might think twice if the download would bust them through to the next tier of service, forcing them to pay more.

And, hmm, who is most threatened by Web entities selling movies and TV shows? Why -- that would be cable companies! How coincidental! By making downloadable video more expensive, cable companies might convince customers to just watch cable TV or get a movie on cable's pay-per-view. Amazing how that works, huh?

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